By Vin Gopal
My Legislative District 11 partners, Assemblywomen Margie Donlon and Luanne Peterpaul, and I have joined other state lawmakers and independent pharmacists to address the impact of Pharmacy Benefit Managers (PBMs) on rising drug prices.
In light of a recent New York Times investigation that suggests PBMs are overcharging New Jersey patients and pharmacies, threatening our residents’ access to medications that are critical to their healthcare, we need to take a comprehensive look at their pricing policies.
PBMs, which serve as an intermediary between pharmacists, employers, and insurers to ensure the most cost-effective medication routes, are ostensibly obligated to negotiate discounts for generic drugs to make them more affordable.
The Times investigation found that’s not always the case.
If state health benefits programs and Medicaid are being taken advantage of by PBMs or charged increasingly high premiums, as the New York Times investigation alleged, those costs are footed by taxpayers for the PBMs’ private gain. There is an urgent need to address the impact of PBMs on the current market.
That’s why we have joined Senate President Scutari, Assembly Speaker Craig Coughlin, Senate Health Chairman Joseph Vitale, Senators Raj Mukherji, Troy Singleton, Linda Greenstein, and Assembly Health Chairman Herb Conaway, M.D., in affirming our commitment to affordable prescription drug costs and regulating PBMs.
Ensuring access to healthcare is a top priority for our Legislative District 11 office and regulating PBMs and their impact on the cost of drugs has been a core initiative of the legislature. Last year, we passed a historic package of bills to make prescription medications more affordable, which included a law to tighten rules for PBMs. Signed into law last July, that bill mandates transparency and disclosure for lower-cost prescription options, prohibitions on overcharging, and strengthened regulations for contracts between PBMs and pharmacies. It also set penalties for violations and established licensing requirements and stringent reporting obligations.
We also have been hearing from constituents and independent pharmacies in LD11 who report skyrocketing drug prices that pose an increasing threat to their health. Seniors and low-income families are the most vulnerable to unfair pricing policies by PBMs, which are ostensibly obligated to negotiate discounts for generic drugs needed by New Jersey patients.
The New York Times investigation suggests, however, that high markups are extremely common for cancer medications. Those markups can delay or prevent patients from getting their prescriptions. For patients undergoing cancer treatment, delays in getting medications can make the treatment less effective and even cause adverse health outcomes.
The Times investigation revealed concerning practices of overcharging for medications and limiting access to generic medications to increase PBM profits. These practices are driving some of our independent and local pharmacies out of business. Inflated drug prices also threaten the state’s fiscal health.
PBM overcharges affect thousands of individuals in our state, but this is not just a New Jersey problem.
Other states also have reported price gouging by PBMs. Oklahoma, for example, reported being overcharged by more than $120,000 a year for a single patient’s cancer drug. As in New Jersey, Oklahoma taxpayers had to foot the bill for the overcharge. In fact, the Times investigation noted that the six states it looked into all reported that their taxpayers have been unlawfully and unfairly cheated by PBMs.
We are committed to ensuring that our residents can receive the highest-quality care possible and to making sure the medications they need as part of that care are affordable.
On a final note, we want to wish everyone a happy and safe July 4.
